what country refer to on tax classification

[Former Member]

hi,

1) The country of material tax classification in material master is country where goods to be shipped out?

2) The country of customer tax classification in customer master is country where the goods to be received or the customer ship to country?

thanks

[Shiva_Ram]

I think similar question was answered in the forum before, you can refer OSS Note 872449 - Tax determination in Sales and Distribution for details.

Regards,

[Former Member]

hi,

i clarify again, my client is not in india. i just want to know the general practice of this particular field for tax classification in XD03.

so meaning country for tax classification in XD03 is referring to delivery plant in sales order? if the delivery plant in SG, then the country is SG?

it is not referring to country where the goods to be shipped to? a bit confusing as this is customer master. 

thanks

[jpfriends079]

my client is not in india. i just want to know the general practice of this particular field for tax classification in XD03. 

Whatever the discussion we had earlier, is nothing to do with any specific country. It's general practise following world over. I have used India as example.

If not mistaken for Singapore, 7% of GST is applicable for local sales. If your are exporting the goods out of SG, then GST is 0%.

Thus, in that case tax determination will take place based on following:

Delivery Plant Country or Departure Country	Ship-to Party Country or Destination Country as maintain in Ship-to Party address	Tax Classification for Customer XD01 / XD02 / XD03	Tax Classification for Material MM01 / MM02 / MM03	Tax Rate %
SG	SG	1 - Liable for Tax	1 - Taxable	7 %
SG	US	0 - Tax exempted	1 - Taxable	0 %

so meaning country for tax classification in XD03 is referring to delivery plant in sales order? if the delivery plant in SG, then the country is SG?

Yes. The departure country would be based on country maintain for delivery plant.

it is not referring to country where the goods to be shipped to? a bit confusing as this is customer master.

Yes. It is not referring to country where, the goods are to be shipped to. System would determine Goods ship to destination from address as maintain general data of ship-to.

Thanks, JP

[jpfriends079]

Banniya

I thought, I answered all your queries for Tax classification.- XD03 liable for taxes

In both the master, the country which you can see is tax classification grid is the departure country, determined from Delivery Plant in sales order.

Regards, JP